Wall Street slides as oil spikes and AI concerns grow louder

Oil prices continue to soar and concerns over the AI investment boom are weighing on Wall Street, with pre-market Nasdaq shares expected to open weaker, slipping about 1.6 percent. Meanwhile, North Sea Brent crude, trading at $108 per barrel, remains well above the $100 benchmark. Anthropic CEO Dario Amodei has called for a slower development pace in cutting-edge AI, prompting investors to fear reduced investments in chips and data centers.

He has advocated for independent safety auditors and common rules, including with rival China. Existing AI infrastructure leaders are facing pressure, while software stocks appear relatively resilient. However, calls for stricter safety measures in AI development do not yet signal an outright halt in investments. Meanwhile, the shutdown of the Saudi east-west pipeline heightens worries about oil supply, with Yanbu's export stocks from the Saudi industrial and port city lasting only five to seven days without the pipeline's restart.

Talks between Iran and Gulf states to resolve the standoff have been postponed. Additionally, the Federal Reserve's (Fed) policy meeting on Wednesday could bring a 92 percent chance of a rate hike, underscoring the week's twin concerns: how high will energy costs climb, and how much growth is already baked into AI expectations.